An evaluation of the financial performance of Malta’s leading telecommunication entities : a comparative study

Abstract

Purposes: This study evaluates the financial performance of local leading telecommunication entities for the period starting 1st January 2009 and ending 31st December 2014 through the use of financial ratios. The areas addressed include profitability, asset management, financial risk and liquidity. General market trends and market shares are also analysed in an attempt to explain changes in financial performances of the mentioned entities. Design: The objectives of the study were addressed through three semi-structured interviews conducted with representatives of each of the three telecommunication entities under study. Such interviews were used to corroborate the financial ratio analysis conducted on the entities’ financial statements via Microsoft Excel. Findings: From this study’s results, no significant discrepancies were noted between the three entities in terms of their financial performance. Furthermore, the different areas of financial performance under study were not dominated by a single entity. Rather, these areas were found to be fairly shared by the three entities under study in terms of which entity performed best in that area. Conclusion: The analysis performed and discussions with the interviewees concluded that the entities under study are financially sound and continuously striving to improve every aspect of their financial performance. Implications: While maintaining the current measures and procedures in place, local telecommunication entities should give more importance to financial ratio analysis as a means to monitor their performances. Furthermore, there is need for the Malta Communications Authority to report more segregated information in terms of industry key performance indicators.